The present invention relates to methods using computer software assessment, monitoring, and documentation to carry out complex financial transactions.
Many computer systems are known for use in assisting in the evaluation, establishment, and monitoring and reporting on complex financial transactions. The original Cash Management System, for assessing levels of funds in various accounts and sweeping balances to maintain desired levels of cash in different investment pools, is set forth in U.S. Pat. No. 4,346,442. More recent patents on methods of carrying out complex financial transactions are U.S. Pat. No. 5,715,402, for a method and system for matching sellers and buyers of xe2x80x9cspot metalsxe2x80x9d; U.S. Pat. No. 5,644,721, for a multiple currency travel reservation information management system and method; and U.S. Pat. No. 5,239,462, for a method and apparatus for automatically determining the approval status of a potential borrower. No art is known that pertains to assessment or administration of tax credits and/or passive losses or to redirection of same to charitable or public purposes for mutual benefit of the public, an investor, and a charity or public entity.
The object of the present invention is to provide a method for facilitating the funding of local public works and other charitable and public endeavors using the established benefits of tax credits and/or passive losses flowing from partnership products such as low income and elderly housing facilities. Through application of the present invention, a company""s investment in a limited partnership is linked with a need of a charity or public entity such as a school district, and monetary benefits are provided to the company as return on its investment as well as to the charity and the public interest.
According to the invention, a need of an entity such as a capital need of a public school district is identified and prioritized, preferably through a computer listing and ranking of such needs. If the top priority projects include capital needs for which municipal bonds may be issued, the cash flow needs for servicing and retiring the bonds are assessed and computed. A supportive corporation, likely in the locality, is identified and asked to invest in a limited partnership which throws off passive losses and tax credits usable by the corporation; the amount of investment required is computed based on the cash flow required for the need and any bond servicing to be applied. The corporation makes the investment, in one payment or a series of payments, and the tax losses and credits begin to accrue. At specified times the corporation pays a portion, normally half, of the amount of the annual tax credit and/or passive loss that it receives, over to the charity or public entity to meet the need or bond servicing identified and linked to the transaction. After years of such credits, normally about 10, the need is met or the bonds retired, and the credits stop according to the limited partnership agreement. The limited partnership interest is then liquidated and part or all of the remaining capital investment is returned to the corporation or rolled over into a new investment.
The investing corporation benefits from the tax credits and the passive losses, donates for instance half of the dollar value of the tax credits and/or passive losses to the charity or public entity and takes tax deductions against its regular income therefor, receives an adequate after-tax return on its investment, and is hailed locally for its support of the worthy cause. The charity or public entity receives the money it needs without raising dues from its members or taxes on its citizens.